REMARKS BY THE PRESIDENT
IN STATEMENT ON FISCAL RESPONSIBILITY
The Roosevelt Room

2:10 P.M. EDT

THE PRESIDENT: For more than seven years now, our nation has stuck
to a course of fiscal discipline, making tough choices that has resulted
in the elimination of record deficits, investing in our people and
paying down our debt.

Clearly, the strategy is paying off. It has given us the longest
economic expansion in our history, over 22 million new jobs and the
largest budget surplus in history. Now, we have the chance to pass
responsible tax cuts, continue to pay off the national debt and keep our
prosperity going.

Instead of following the path that got us here, congressional
Republicans want America to take a U-turn. Over the past two weeks,
they have pushed through a series of expensive tax bills, one after
another. They've been in a rush to get these bills passed before their
convention; but they've been in no rush to get them to my desk, because
they fear what will happen when the American people have a chance to add
them all up and do the math.

Taken together, Republican tax bills now stacking up from this
Congress would cost nearly $2 trillion over 10 years. By our
accounting, that would put America back into deficits. Even by their
own rosy scenario, the Republican tax bills consume every dime of the
surplus the American people have worked so hard to create. That's what
this chart shows.

However you add it up, a $2 trillion tax plan is too big, too
reckless, too irresponsible. It leaves nothing for lengthening the life
of Social Security and Medicare, to make provision for the baby boomers'
retirement. It leaves nothing for adding a prescription drug benefit to
Medicare. It leaves nothing for greater investment in education or the
environment or science and technology or health. It would make it
impossible for us to get America out of debt by 2012.

Now, if the congressional Republicans truly think these tax cuts
are good policy, instead of just good politics, they should put them
together and send them down to me right now, before they break for their
convention. Then the American people can add up the costs and draw
their own conclusions. But if they adjourn for the summer and the bills
aren't on my desk, the American people will know that they're playing
politics with our surpluses.

Remember something else -- and this is very important -- these are
projected surpluses. It's not money we have now, but money we might
have over the next 10 years. Think about it: if you got one of those
sweepstakes envelopes from Ed McMahon in the mail saying you may have
won $10 million, would you go out and spend it? Well, if you would, you
should support their tax plan; but if you wouldn't, you should think
again. Because that's what the congressional Republicans want us to do
-- commit right now to spend all the money that we might get over the
next 10 years.

In good conscience, I cannot sign one of these tax breaks after
another without any coherent strategy for safeguarding our future and
meeting our other national priorities. At this rate, there will be no
resources left for extending the life of Social Security and Medicare,
for adding a real prescription drug benefit to Medicare, for investing
in education or for getting us out of debt. And getting us out of debt
will keep interest rates low and keep our economy growing. That could
give the American people the biggest tax cut of all.

Lower interest rates, in a way, are the biggest tax cut we can give
to most Americans. Because of the deficit and debt reduction already
achieved, the average American family -- listen to this -- the average
American family is already paying $2,000 less a year in mortgage
payments, $200 less a year in car payments, and $200 less a year in
student loan payments.

If we keep interest rates just 1 percent lower over 10 years, which
is about what my Council of Economic Advisors thinks we'll do if we keep
paying down the debt instead of giving it all away in tax cuts,
homeowners -- listen to this -- homeowners will save $250 billion over
the next 10 years in lower home mortgage rates alone. That's $850 a
family a year in lower mortgage payments.

And then to see what people are getting you would have to add
proportionally lower car payments, lower college loan payments; and, of
course, with lower interest rates businesses will be able to borrow more
easily and invest more, creating more jobs to sustain our prosperity.
The more you do the math the less sense the Republican tax plan makes.

Consider this: the typical middle-class family will get $220 a
year from the tax cuts the Republicans have passed this year -- just the
ones they've passed this year, not in this Congress. If interest rates
went up because of the Republican plan one-third of 1 percent, just
one-third of 1 percent, then that average family's mortgage payments
would go up by $270, completely wiping out the tax cut and leaving the
average family worse off than they were before.

It does not have to be that way. I have proposed tax cuts to give
middle-class Americans more benefits than the tax bills the Republicans
have passed at less than half the cost. Two-thirds of the relief of our
proposal will go to the middle 60 percent of Americans, including our
targeted marriage penalty tax relief.

Our tax cuts would also help send our children to college, with a
tax deduction for up to $10,000 in college tuition a year; help to care
for sick family members with a $3,000 long-term care tax credit; help to
pay for child care and to ease the burden on working families with three
or more children; to pay for desperately needed school construction.

And because our plan will cost substantially less than the tax cuts
passed by the Congress, we'll still have enough money -- and this is
critical -- we'll still have enough money left to provide a Medicare
prescription drug benefit, to extend the life of Social Security and
Medicare, to pay for the baby boomers' retirement, and to stay on track
to be debt-free by 2012. And, I might add, to keep interest rates lower
so that we'll have billions of dollars in lower home mortgages, car
payments and college loan payments.

We should have tax cuts this year. But they should be the right
ones, targeted to working families, to help our economy grow, not tax
bills so big they put our prosperity at risk. Now we've tried it our
way for eight years, and we've tried it their way for several years
before then. I say to Congress, stop passing tax bills you know I'll
have to veto; start working together with us on a balanced budget that
cuts taxes for middle class families, continues to pay off the national
debt, and invests in America's future.

Over the last seven years, our country has overcome tremendous odds
to create a moment of unprecedented prosperity and promise. But how we
respond to good fortune is a stern test of our values, our judgment and
our character as a nation as how we deal with adversity. I think we'll
meet the challenge; and when we do, we'll ensure that America's best
years are still to come. Thank you.

Q Are you still going to veto each of the bills if the
Republicans did send them down here?

THE PRESIDENT: That is my plan. You know, a lot of these bills,
individually, have a lot of appeal; I'm sure they do. And maybe,
collectively, they have a lot of appeal until you know what they cost.
But it's obvious that if you look at the income tax bill they passed
last year and all these bills they're passing this year, together, they
just eat up the projected surplus.

And let me say, the projected surplus is based on not only -- let
me just make a few more points to you. The projected surplus is based
not only on, I believe, a very rosy scenario by them, a somewhat less
optimistic scenario from us, it's also based on an assumption of
spending which assumes that federal spending will grow less than the
economy will grow over the next 10 years, which is -- at least if you
look at the record of even the Republican Congress over the last four
years, a highly questionable assumption.

So keep in mind, this is before they spend money for anything.
Before they pay for their proposed national missile defense, before they
pay for the promises being made in this national campaign on the
domestic side, before they may decide that at least for the things they
like to spend money on, like highways and things, they want the spending
to grow as fast as the economy grows.

This is a prescription, make no mistake about it, for going back to
the economic policy of the past and going back to higher interest rates
-- and higher interests rates which will take away the benefit of the
tax cut to the vast majority of Americans, an undermine the long-term
economic strength of the country. I know that it's not as appealing in
election year, maybe, but we're right to pay the debt down. We need to
keep getting America out of debt. We need to get rid of it. It's the
right thing to do for the young people of the country.

Q Do the increased projected surpluses make it harder for you to
make this case with every headline saying we're going to see this much
more than we thought? Does that make it more difficult for you to argue
that there is no room for these tax cuts?

THE PRESIDENT: Well, again, I think in the beginning it does.
That's why I"m here making the argument. But it doesn't change the
reality. If you look at the projected surplus, just look at the
spending levels alone, the projected surplus is based on by the
Congressional Budget Office and then just -- but the main thing I want
to say is, once you put these tax cuts in, they're in. They're not like
spending bills. You know, if Congress wants to spend money they come in
next year and they spend money again.

So if the money turns out to be -- let's suppose they spend money
in 2001 and they've got a five-year program, but in 2002 the revenues
tail off, well they don't have to appropriate as much money. They can
always cut back on spending. But once you put the tax cuts in they're
in. It's a lot harder to say, well, I made a mistake I think I'll raise
taxes.

So there should be a tax cut. No one questions that there should
be a tax cut. The question is, how big should it be and who should be
helped by it, and what are the other interests the country has. We
shouldn't mislead the American people about our obligations to keep
interest rates low, because almost Americans will be hurt more by higher
interest rates than they can possibly be helped by any of these proposed
tax cuts. And we shouldn't mislead the American people about the money
we think the Congress is really going to have to spend.

This takes into account -- what if we have in the next 10 years a
bunch of farm emergencies, like we've had for the last three? Let's go
back and look at the extra money we've poured into spending on
agriculture alone in the last three. And if you were in Congress,
wouldn't you want to at least see education spending grow at the rate of
the economy growing?

And look at the commitments they've made there. And so I'd just
tell you, the idea that we would say, okay, here's the surplus, now
let's pass tax cuts which take it all away -- and never mind what might
happen to the revenues, and never mind what new investments we might
have to make as a country that we don't even know about now for the next
10 years -- I think it's very troubling.

Q Mr. President?

THE PRESIDENT: Yes?

Q Do you think Governor Bush played it safe in choosing Dick
Cheney as a running mate? And would you advise Vice President Gore to
similarly play it safe in choosing his running mate? And would you
advise Vice President Gore to similarly play it safe in choosing his
running mate?

THE PRESIDENT: Well, first of all, I don't know -- I think the
most important thing about that decision is that it will -- and
everything I know about Mr. Cheney, personally, I like. I actually was
kind of pleased by the decision, because there's no question that he has
many years of experience in the Congress and in the previous Bush
administration.

But the thing I liked about it was, it further clarified the
choices for the American people, and I think that's important. I think
the most important thing you want out of any election is that the voters
understand what they're doing when they vote, and they understand that
there are consequences to their vote. And it further clarifies that
there are significant choices here to be made. There are big
differences on the environment, on gun safety, on the woman's right to
choose, on civil rights enforcement and on economic policy.

That's what I think the election ought to be about. I think this
ought to be a positive election where people say good things about their
opponents personally and say they have honest differences. And I think
having Mr. Cheney coming on the ticket will help to clarify that there
are big, profound differences between the two leaders and the tickets,
and that those differences will have real consequences for the country.
And I think because he's a good man, we can further dispense with the 20
years of politics of personal destruction and focus on the differences
between the people that are running and the parties, and how it will
change life in America.

So I think anything that clarifies the debate, lifts it up, focuses
it on the issue differences is positive. And there are real, huge
differences, and I think this will help to clarify them and I think
that's positive.

Q Mr. President, you've complained that Congress has been slow
to act on your appointments for judgeships and ambassadorial posts. If
they don't act, do you feel in a mood to do this by recess appointments?

THE PRESIDENT: Well, first, I have made no decision on this. I
haven't made any kind of -- I haven't had a meeting about it; as you
know, I've been otherwise occupied the last couple of weeks. I'd like
to begin by just citing the record here.

I have bent over backwards to respect the constitutional senatorial
appointment process. The record will reflect that I have made less use
of recess appointments than either President Bush or President Reagan,
even when I had a Republican Senate the way they had Democratic Senates.

I think the record will reflect that I have shown more restraint in
that, even when I've had a little more partisan differences with the
Senate than they did on the appointments process -- my predecessors.

So I have shown a reluctance to make robust use of that option.
And I just have -- to be perfectly candid, I've been so absorbed with
other things, I have not -- I don't even know for sure what my options
are, what's out there, what irrevocable consequences could result if I
don't use it during this session, in terms of unfairness to particular
individuals or to the public interest. So I've just go to look at the
facts and make a judgment. But I have not made a decision yet.

Q It does sound like your patience is running out it, though.

THE PRESIDENT: No, but I really haven't made a judgment on this.
I've never been -- if you just look at the record here, I have not been
a big user of recess appointments, because I respect the whole process
by which the Senate reviews these things, even when I think it's been
strained. But I honestly haven't made a decision yet. I just have to
look and see what the options are.

Q On the Middle East, Mr. President, the Palestinians are saying
the deal on the table on Jerusalem is just not doable. If that's the
case how can there ever be a compromise?

THE PRESIDENT: Well, first of all, let me try to frame this in a
way that I think that the Palestinians and the Israelis, and I would
hope other friends of peace around the world would think about it. We
all know how hard Jerusalem is because it goes to the sense of identity
of both the Palestinian and the Israeli people. And in a larger sense
the adherence of Islam, Judaism and Christianity all around the world.

In a sense, therefore, the City of Jerusalem is not just
Yerushalaim for the Israelis and Al Quds for the Palestinians. It is a
holy place that reaches beyond even the geographical boundaries of the
city.

If there is to be an agreement here it must be one which meets the
legitimate interests of both parties. And that requires a certain
imagination and flexibility of defining those interests and then
figuring out an institutional and legal framework for them that,
frankly, just takes more time and more reflection and probably less
pressure than was available in our 15 days at Camp David.

But in any negotiation, it must be possible for both sides to say
they got most of what they wanted and needed, that they were not routed
from the field, that there was honorable compromise; and, so, therefore,
the issues cannot be framed in a "you have to lose in order for me to
win, and in order for you to win, I have to lose" framework. If they
are like that, you're correct, then we can never reach an agreement.

But I have spent a great deal of time, obviously not only studying
about this, but listening to the two sides talk about it, think about
it, and looking at all the options available for a potential resolution
of it. And all I can tell you is, I'm convinced that if the issue is
preserving the fundamental interests of the Palestinians and the
Israelis, and the genuine sanctity of the Muslim, Christian and Jewish
interest in the Holy City, then I think we can do that. I just do. But
we couldn't do it in the 15 days we were there.

The decision that will have to be made is whether there is a way --
for example, in this case, you mentioned the Palestinians -- for the
Palestinians to win their fundamental interest without also winning the
right to say they have routed the Israelis, or whether there's a way for
the Israelis to protect their fundamental interests without also winning
the right to say they have stuck it to the Palestinians. I believe
there is, and we're going to explore how we might persuade them, all of
them, that there is and where we go from here.

And I hope that just this kind of thing I've been talking about
will spark a whole range of, oh, articles in the press, commentators on
the TV programs, other people talking and thinking this way, trying to
be innovative and open and -- you know, I realize the incredible
pressure these people are under in even having this discussion. That
is, in the end, why I realized we couldn't get it done in two weeks.
You've got to get used to talking about something for a little bit
before you can then entertain how you can create an edifice that you
hadn't previously imagined. And I think we'll be able to do it.

Q How long are you going to wait before you give it another
shot?

THE PRESIDENT: I can't answer that. I've tried to make the
judgments here for eight years based on what I thought would aid the
process, and I can't yet tell, Mark, what would be most in aid of the
process; I just can't tell yet.